STE's Stocks Investing Journey

Today I want to share something I genuinely enjoy and honestly, something far more important than endlessly crunching numbers or tweaking valuation models. Investing isn’t won on spreadsheets alone. P/E ratios, discounted cash flows, and balance sheets matter, but they don’t explain why markets panic, overshoot, or stay irrational far longer than they should. That part is human. Remember John Maynard Keynes' most famous quote on market irrationality , "Markets can remain irrational longer than you can remain solvent," highlighting that speculative bubbles or crashes can persist far beyond what logic dictates and emphasizes the unpredictable nature of financial markets and the risks of betting against them, even when you believe they are mis-priced or irrational. At its core, investing is about people. Markets are a giant arena of emotions : fear, greed, overconfidence, and herd behavior playing out in real time. For value investors, this is not noise to ignore; it’s the ...

Over the years, I’ve realized that investing isn’t really about finding the perfect stock or predicting the next big move. It’s more about how we think. Two people can look at the same balance sheet, the same chart, the same news, and walk away with completely different conclusions. The difference is rarely intelligence. It’s the mental model they’re using, often without even knowing it. Mental models are just ways of understanding the world. Simple ideas that help us make sense of messy reality. In the stock market, where noise is loud and emotions run high, having a few good mental models can keep you grounded. Not to make you smarter than everyone else, but to stop you from doing stupid things at the wrong time. Here are some mental models that have quietly shaped how I navigate the market. <Ai Image> The Pari-mutuel System The stock market works more like a betting system than most people realise. In a pari-mutuel system, your payoff doesn’t depend on whether you’re right...

The stock market often feels like a rollercoaster, but investing isn’t only about spreadsheets, ratios, or balance sheets. At its core, it’s a psychological journey. The market’s sharp swings and tempting narratives don’t defeat most investors ,our own instincts do. These instincts were shaped over thousands of years to help us survive, not to manage a modern portfolio. That’s where behavioral finance comes in. It shines a light on how emotions, biases, and mental shortcuts quietly influence our decisions, often to our detriment . By blending age-old wisdom with modern insights, we can better understand why investors stumble and how to avoid the same traps. Sun Tzu’s words from The Art of War still ring true: “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” In investing, the real enemy isn’t the market—it’s our own behavior . Learn to recognize it, and better decisions tend to follow. <Image credit https://jingyan.baidu.com/article/a3a3f...

 Hi everyone, fellow value Investors,is me again , back with another deep dive into the wild world of stocks. Today, I want to take you on a journey to explore something that’s been buzzing in my mind— why the stock market isn’t just a linear game of numbers and predictions, but rather a living, breathing *Complex Adaptive System* (CAS) . Think of it like a bustling ecosystem, constantly evolving, adapting, and reacting to the chaos around it. And what better example to unpack this than the current US stock market, especially the tech and AI sectors, which have been riding a rollercoaster of global capital inflows over the past two years? What is a Complex Adaptive System?   <source: wikipedia.com> The Non-Linear Nature of Markets Forget the textbooks that try to boil the stock market down to simple equations or predictable trends with lot's of jargons and technical analysis. The reality is far messier,and that’s what makes it exciting! A Complex Adaptive System is all a...

Animal spirits  is the term  John Maynard Keynes  used in his 1936 book  The General Theory of Employment, Interest and Money  to describe the  instincts ,  proclivities  and  emotions  that ostensibly influence and guide  human behavior , and which can be measured in terms of, for example,  consumer confidence . It has since been argued that  trust  is also included in or produced by "animal spirits". image credit to en.wikipedia.org Even apart from the instability due to speculation , there is the instability due to the c haracteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic.  Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits—...

Yes, this has been one of the hottest topics recently “ Hyflux applies for court supervision to re-organize liabilities, businesses “ ( here ). Thousands of investors will be affected by this sudden collapsed of Hyflux, yes, including Me. Nobody knows how things will turn out eventually under this so-called “ debt’s restructuring “ but I think for sure it is not good for ordinary or preference shareholders who’s typically rank lower in term of debt’s seniority as compared to secured bank loans. Hundreds of millions of bond and perps securities holders will also be affected. In anticipating for the worst, I will need to write off   $114,675.44 from my books as I am holding 1270 units of their 6% CPS. Total cost = $117,816.81 - $3141.37 ( interest received on 25 th April) Enough of warning has been given by analysts, bloggers on the problems of Hyflux in servicing their loans ( including bonds/ perps / CPS ) due to the company’s inability to generate eno...

image credit to youtube.com I hope stock market will crash tomorrow !! Hey! wait a minute ( ちょっと待って) , don’t throw rotten eggs or curse at me !! J Here is my story …. Every stock market investor knows the old adage: Buy low, sell high . We often hear this in investment courses or seminars we had attended, even in the financial blogosphere. We talked about “ Price is what you pay, value is what you get “, we wanted to buy cheap at best “bargain “ and high M.O.S ( margin of safety ).

According to Warren Buffett "Investing is not a game where the guy with a 160 IQ beats the guy with a 130 IQ" and what Buffett says about what is necessary for investing successfully: Temperament is also important. Independent thinking, emotional stability, and a keen understanding of both human and institutional behaviour is vital to long-term investment success. I’ve seen a lot of very smart people who have lacked these virtues. Also, investing is simple, but not easy. It requires independent thinking and emotional intelligence more than IQ . When markets are tumbling and fall like no tomorrow, IQ is not going to help you to stay away from selling and buy even more at most bargaining prices.

Finally, one of my favourite and top Behavioral  Economist Richard H Thaler from University of Chicago won the 2017 Nobel Laureate in Economics , joining another top behavioural economist like Robert J. Shiller and   Daniel Kahneman   in the list of Nobel Laureate. He has been recognized by much insightful research link to the economic decision and psychology like “ Endowment Effect “ and “ Mental Accounting “ and also a writer of many best-selling books in economics and behavioural finance.

  Personal Cash Flow Management I have seen many blogs have written about monitoring the expenses and some blogger's recommendation of apps which could monitor our expenses in detail. Frankly, I didn’t monitor my expenses in such manner and for me “ agak-agak ”  know how much I spent monthly on those fix items and some major items yearly such as holidays & staycations, insurance , home appliance ( like recently changing my TV and refrigerator after using it for many years ), no tax since no active income etc…

As investor who has gone through many business and market cycles in the past 19 years of investing, Yes! I still made a  terrible mistake and succumbed to our own biases in trying to time the market. Although we still can feel some ripples effect from US Presidential Election from time to time but I think its impact on the stock market has mostly subsided, as we could see that Dow Jones Index rebounded strongly after that and keep trading at record high recently.

image credit to AZ Quotes.com John M Keynes may be famous for his metaphors of using “ Beauty Contest “ to explain and describe the investors' perception which caused the price fluctuation in the stock market  and “ Musical Chair “ of how investors speculate in the market. You may find these two interesting metaphors here ( Keynes on Beauty Contest ) and here ( Keynes on Musical Chair ) if you have never heard about it.

<Edited with additional info and video clip > Investment Success: Skill or Luck? We always attribute our success in life or any aspect in life ( e.g career development /doing business / investing ) to our skill or performance but does  “luck”  has any place in these successful events. If we think that  skill  ( talent ) play a very important role in investing,, then you may find that some very talented or intelligent people fail in investing ( e.g Newton ), and if you think that investing is purely on luck, then we may have a puzzle to explain the success of great investors like Warren Buffett or Peter Lynn and others in beating the markets for multiple years.